As we approach the end of a hot, humid and stormy February, we hope you have been able to refresh and revitalise with a break during the holiday season. Our articles cover a range of interesting topics for your enjoyment.
Traditionally, January is a quieter month due to the holidays and court closures. January 2024 was no different to this trend with Small Business Restructures dropping from over 100 in December 2023 to a little over 40 in January. Similar drops in appointments for court liquidations, Creditors Voluntary Liquidations and Voluntary Administrations, however, winding up applications bucked the trend with 300 for the month of which the ATO filed 80 winding up applications as opposed to 69 in December 2023. Total formal appoinments for January 2024 amounted to 614 which consisted of 90 Court Liquidations, 422 Voluntary Liquidations ( MVL and CVL ) and 102 Voluntary Administrations.
The Albanese Government changed course to amend the legislated Stage 3 Tax cuts which are scheduled to commence in July 2024. The amended tax cuts will result in a benefit to low income earners who have worn the brunt of higher costs of living due to inflation. For instance, a worker on $40,000 taxable income will receive a tax cut of $654 for the year but under the original plan would have received nothing. However, they would have benefited from the Stage 1 and 2 tax cuts. Individuals with a taxable income of over $100,000 would benefit from a tax cut of $2,179 which is $804 more than under the original plan.
High income earners with a taxable income of $200,000pa would have benefited under the original plan for Stage 3 with a tax cut of $9,075 which is expected to be slashed to $4,529.
These amendments are subject to the Labor Party gaining support from the independents and minor parties to legislate them in Parliament.
National Australia Bank released its result for the December quarter which showed cash earnings tumbling 17 per cent in December quarter to an amount of $1.8b.
The reason for the drop was cited as credit impairment charges as the bank faced higher loans in arrears. Cash earnings before impairment charges and tax were down 3 per cent when compared to the second half of the 2023 financial year.
Credit cycle tightening is likely to continue with stickier inflation and a government fiscal policy that conflicts with monetary tightening by the Reserve Bank. Economists have now revised predictions of an official interest drop to late 2024.
What a week we have had with resignations and new appointments to several of our largest companies. Virgin Australia's CEO, Jayne Hrdlicka resigned after doing four years of the heavy lifting and abandoning her initial plan to lead it to a public share offer on the ASX. No replacement has been found for the Company which was bought by Bain Capital from the Voluntary Administrators in 2020.
A sudden departure of Woolworths boss, Brad Banducci after he walked out of a Four Corners interview after questioning alleged price gouging and unfair dealings with farmers and suppliers. His replacement will be an internal candidate who leads the company's digital division, Amanda Bardwell. Woolworth's shares dropped 6.2% following the shock announcement.
Qantas, in an attempt to overhaul a battered reputation, has appointed John Mullen as the new chairman who currently chairs Brambles and Treasury Wine Estates. The current chairman, Richard Goyer will stand down in July 2024. Maybe we will see an improved wine selection on Qantas flights!
Whilst wages continue to rise and unemployment remains at near record lows, the productivity of the Australian economy continues to falter. New industrial laws have restored the union bargaining might of old and allowed the Maritime Services Union of Australia to continue its monopoly of the waterfront by imposing more costs on the economy.
Labor's energy policy enabled legislation of ambitious emissions which are likely to lead to further price increases and less reliable base load power. Price controls and other regulatory controls will likely lead to supply-side problems.
The out of control NDIS program and the Gonski school funding are areas where the government needs to haul in spending but Chalmers has not had any success on these fronts.
Chalmers continues to bank on high commodity prices, in contrast to its energy policy, to prop up the Australian economy together with Bracket creep in income tax. Heaven help us when the resource boom ends.
Every year, and this year no exception, Helm Advisory is thrilled to announce once again we will be holding an art event.
Location and art show details will be available soon. In the meantime, keep your diary free and save the date for Wednesday 15th May 2024.
